September/October 2004

AGRReports breaking news

ICBC and Speedy Glass Settle

LEGAL
Insurance Corporation of British Columbia (ICBC) and Autostock International’s Speedy Glass business unit have announced a settlement agreement in the action brought by ICBC against Speedy for failure to comply with ICBC’s Glass Express program policies.

In a press release issued July 21 it was announced that Speedy Glass has agreed to pay ICBC the amount of waived deductible and referral fees, as well as all of ICBC’s investigative and legal costs.

Some Speedy Glass shops will remain on suspension from the Glass Express program for varying periods of time depending on the shop. ICBC has, however, reinstated supplier status for all Speedy Glass shops.

“When these allegations were brought against us, we were extremely concerned because it has always been our policy to comply with the policies and procedures set out by ICBC,” said Stephen Schober, Autostock International president and chief operating officer. “We immediately launched a full review of our procedures and retained Ernst & Young to undertake an audit of our accounting records, in consultation with the ICBC. We were shocked and embarrassed to discover that certain Speedy Glass shops had breached contracts with
ICBC.”

“We were pleased, however, that the Ernst & Young review found that other allegations made by former employees in affidavits supplied to ICBC about Speedy Glass’s accounting practices were unfounded,” Schober continued.

ICBC’s president and chief executive officer Bill Goble was also quoted in the press release.
“The senior management team at Autostock International and Speedy Glass has cooperated fully with ICBC and we are satisfied with the steps taken by them to resolve this matter,” said Goble. “Deductibles play a key role in helping to keep claims costs down and
therefore premiums low for all customers.”

As a result of the allegations and subsequent internal review, several Speedy employees have been disciplined and two staff members who were found to have participated in the prohibited practices have resigned from the company.

IGA Starts Legal Campaign; Begins “The List”
The IGA has announced the first step in its legal campaign to change industry practices, focusing this move on the language used by some Third Party Administrators (TPAs) and/or insurers in telephone scripts for initial claims.

“The primary tactic of the TPA’s to dissuade consumers from the shop of their choice is to tell the caller that they may have out of pocket expenses,” said Sue Johnson, IGA co-director. “To combat this, the IGA is compiling a database of auto glass shops who are willing to put it in writing that they will not ask the customer to pay the difference if the insurance company doesn’t pay in full.”

The list, once compiled, will be sent to the TPAs, along with a letter from the IGA demanding that they change their script when dealing with any glass shops on the list. Once provided with the list, if a TPA were to continue saying that a customer might be responsible for our of pocket costs, it could face legal action.

To be part of the list, independent glass owners are asked to write a letter addressed to the IGA. The IGA will then negotiate with the TPA on behalf of its members on the list.

AGRSS Registration Reaches 1000The Automotive Glass Replacement Safety Standards (AGRSS) Council has announced that its list of registered shop has now surpassed 1000 locations.

“We topped 1000 shops last week,” said Jean Pero, chair of the AGRSS registered company development committee on July 22. “In just the last few weeks we’ve had more than 15 companies register, reflecting a growing commitment to the industry and making the industry stronger, better. AGRSS now has 1015 registered shops.”

“Hawaii remains the only state without representation,” she added. “Three companies in New Mexico signed up shortly after our last announcement, so now we have nearly every state in the union represented in AGRSS registration.”

Texas Auto Glass Co. Settles No Call Dispute
Area Wide Auto Glass in Katy, Texas, is one of eight companies accused of violating the state’s no-call law. The suit, brought by
the Texas Public Utility Commission and State Attorney General Greg Abbott, reached a settlement on July 8, the Dallas Business Journal reported.

According to reports, the settlement agreement includes an admission of violating the law and a payment of civil penalties and attorney’s fees totaling $59,250.

Claims AdjustersArrested for Fraud
According to an article in Insurance Journal, three auto insurance claims adjusters were indicted in New York on insurance fraud and related charges. It is alleged that between December 2002 and March 2003, the defendants received illicit payments, ranging from $50 to $200, from repair show owners in return for submitting enhanced repair estimates that totaled $23,957. The carriers affected were Tri-State Consumer Insurance Co., Eveready Insurance Co. and Empire Insurance Co.

“Law enforcement continues to crack down on insurance fraud in a coordinated and effective way,” said Gregory Serio, New York superintendent of insurance. “Fraud is a serious crime that victimizes honest insurance consumers and we’re committed to arresting these offenders to protect New Yorkers.”

The defendants were Gabe Deri, an appraiser for Ti-State Consumer Insurance Co., Carl Iacona of AAB Services and Craig Wunderlin of Metro Claims Service Inc.

LAUNCHES
IGA Announces Dates, Expansion of Show
The Independent Glass Association (IGA) has announced that an expanded version of the Independents' Days Conference and Glass Show will take place February 24-26, 2005 at the Rosen Plaza Hotel in Orlando, Fla. It will mark the eighth annual event, sponsored by the
IGA.

"We are planning on expanding the event and turning it into the spring event for the glass industry," said IGA's Sue Johnson. "The event will have an expanded seminar track, featuring seminars for both auto and flat glass companies, and a first-class exhibition. We are excited to be gearing up for what looks to be IGA's best event ever. Seminars will include information about IGA's litigation and several new programs the association will announce. Our goal is to not only have independents survive, but to prosper in the future."

The association has also hired Key Communications Inc. publishers of AGRR, USGlass and WINDOW FILM magazines, among others, to manage and plan the event.

"Together we are planning a major expansion of the show and plan to make it into the spring show for the industry," Johnson added.

MGA Launches Glass Network,Names Vp of Marketing
The Minnesota Glass Association (MGA) has announced that the glass network it created in conjunction with Minnesota Independent Insurance Agents and Brokers Association was scheduled officially begin operations on August 2, 2004.

Additionally, the MGA has announced that Mike Schmaltz has been hired as the Glass Network’s vice president of marketing. He will be responsible for the day-to-day operations and marketing of the company.
Schmaltz worked for Harmon Glass for 21 years and for Northstar Glass for nine years prior to joining Harmon. He is a founding member of the MGA and has served two stints as treasurer of the MGA and three turns as a member of the board of directors.

The announcements were made in an MGA member update.

EXPANSIONS
Asahi to Establish New Furnace in China
Tokyo-based Asahi Glass Co has announced its decision to establish a new float furnace for automotive glass. The company plans to spend nearly $100 million US to establish a new firm in Suzhou, Jingsu Province, China with a target set up date of May 2004 and production slated to start in the second quarter of 2006.

The Suzhou plant will be Asahi’s second Chinese unit equipped with a float glass furnace and the main product of the facility will be raw glass for automotive use. Asahi is anticipating the sale of the product to AGC Automotive Qinhuangdao Co, Asahi Glass’ processing base for automotive glass, and other Chinese firms engaged in processing automotive glass, as well as exporting it to Japan.

According to Asahi, China was posting 4.44 million units of auto production in 2003, placing it fourth in the output of vehicles after the United States, Japan and Germany.